Further Reforms in the Vatican Bank

Pope Francis is known for his push for reforms and greater transparency within the Vatican, and his reforms targeted Vatican’s Bank as well. Earlier, in 2013, the Bank has reported a major drop in its net profits, from €86.6 million (in 2012) to €2.87 million. That was just the second time that the Vatican Bank has published its records within its 127-year history span, and the move was part of Pope Francis’s efforts towards transparency. When this plunge in profits was reported, the Pontiff considered closing down the Vatican Bank, but later decided to keep it open and reform its board.

As a consequence, Pope Francis announced today, the 8th of July 2014, that he decided to appoint a new board of superintendence to monitor and run the Vatican Bank, as part of a new strategy meant to create simpler and more efficient structures within the institution. The plan is not only to make the bank more transparent and profitable, but especially to prevent it to become the center of further scandals, as it tended to be until now. For example, part of the losses which caused the dive in profits was a reported €14.4 million sum which was “donated” by a cardinal to an Italian film company tightly connected to the Holy See.

The new dispositions given by the Pope to the Vatican Bank suggest a thorough reorganization. The board of superintendence was reappointed and its former president, Ernst von Freyberg, pictured above, will leave the bank’s ranks. A person familiar with the current reforms of the Vatican Bank said that Jean-Baptiste de Franssu (who was appointed to the Vatican Council for the Economy earlier this year) will be the most likely replacement as head of the board of superintendence, but there was no official statement yet on the matter.

The new policy of the Vatican Bank will focus on a zero tolerance approach for any suspicious activity, and the bank is currently going through a fervent process of closing down all accounts that don’t meet the tight new standards, including dormant accounts. More than 3000 such customer relationships were terminated as part of Pope Francis’s reforms, out of which most were reportedly closed for being dormant. Traditionally, the Vatican Bank has among its clients the Swiss guards which help protect the Pontiff, priests and nuns subordinated to the Catholic Church, as well as global religious organizations or other Vatican employees.

The opaque way the Vatican Bank was run until now is widely considered to be the main cause for the financial scandals in which it was involved over the years. The recent push for transparency is meant to both make it more efficient, and prevent any future dubious activity. It is expected that tomorrow, on Wednesday 9th of July, the new president of the Vatican Bank’s board will be announced.